Why isn't state income tax withholding enough?

State: Wisconsin. File 0,Single. No exemptions, dependents, etc. So max withholding per W-4. About $40,000 income range. BUT...still not withholding enough to cover liability at end of year. HOW?? I can add "additional $$ to withhold", but why should I have to? Shouldn't the filing max of 0,single, no dependents or exemptions at least cover the liability? I've always claimed this way and never had a problem until 2 years ago. I didn't change anything, but something must have changed, cause now I end up having to pay in the last 2yrs. I know the Federal Tax stuff changed, but my Federal is fine (lower refund, but still covered). The State is where the problem is. Help. This doesn't make sense that I have to pay in when my withholding is the max. TIA for any help!!

Update:

I do have W-4 forms filed for both Federal and State as required. Everything I've looked up states that what I file is the max withholding...hence should cover the liability. I'm in the 4.11% bracket for State Income Tax. Yet I've noticed my checks have only withheld about 3% for State Income Tax. Don't understand how the max deduction is less than the liability.

2 Answers

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  • 1 month ago

    WI has it's own state form, fill that out. Federal carry over may not work for WI now that fed rates have changed?

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  • NA
    Lv 7
    1 month ago

    You'd think if all you had was a steady paycheck, withholding would work.

    IRS has improved (it used to go off the rails at $50k).  

    There still seems to be an erroneous belief that everyone gets deductions, itemizes or has credits.

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